IGL panic as Delhi orders partial EV switch
For Electric Vehicle (EV) manufacturers, the future looks exciting.
But for gas retailers, it seems increasingly scary. This report learns a directive from the Delhi government that the capital's taxi operators must move towards 100% Electric Vehicles (EVs) by April 1 (2030) is ringing alarm bells at Indraprastha Gas (IGL).
At stake is 1.25m cm/d of CNG sales, or 15% of its volume, that IGL stands to lose. On November 24 (2023), Delhi's lieutenant governor VK Saxena approved the Delhi Motor Vehicle Aggregator and Delivery Service Provider Scheme, 2023.
Under the scheme, cab operators must ensure that 5% of their fleet includes EVs within six months from the date of implementation of the new policy, rising to 50% in three years and 100% in five years. All cab operators, delivery service providers and e-commerce companies must convert their commercial vehicle fleets to electric by 2030.
After December 31 (2023), when the old policy ends, the new policy will take effect. Anxious IGL is worried because CNG drives its sales.
"A gas retailer needs a balanced portfolio of households, businesses, factories and CNG buyers as customers," says a gas sector source. "That is not the case for IGL."
Other gas retailers worry state governments across India might replicate Delhi's move and develop similar EV policies. "CNG is popular in Gujarat, Delhi and Mumbai," adds our source.
"But in other states, it is still developing." Mahanagar Gas (MGL) might face trouble if a similar policy is introduced in Mumbai.
"MGL sells 400,000-kg/d of CNG to about 55,000 cabs, mainly to Ola and Uber, of the total 2m kg/d of CNG it sells," we learn. "There would be a tremendous impact if Mumbai cab operators moved towards 100% EVs."
Maharashtra released a draft policy in 2021 to make EVs account for 10% of new vehicle registrations statewide and 25% of public transport in Mumbai, Pune and other cities by 2025. "Maharashtra deferred its earlier target to convert all government vehicles to EVs by April 2022, which it missed."
we hear.